The U.S. public markets made substantial strides toward recovery in 2024, raising confidence among IPO hopefuls that market windows will open in 2025. However, uncertainty remains present amid sweeping policy changes, lingering inflation concerns, and geopolitical tensions.

In this article, we look at how the U.S. public markets performed in 2024 compared with prior years, and we provide our thoughts on how these trends will continue to shape the capital markets in 2025.

2024 IPOs by Volume and Value

There were 225 IPOs in the U.S. public markets in 2024. This was 46% higher than the 154 IPOs in 2023 and 24% higher than the 181 IPOs in 2022. Capital raised in IPOs during 2024 was $38.3 billion, nearly a 65% increase compared to the deal sizes seen during 2023, and nearly an 84% increase over the deal sizes in 2022.

The average number of IPOs over the last 20 years was 254 per year (214 per year when excluding outliers during the financial crisis in 2008-2009 and the “SPAC boom” in 2020-2021). The 225 IPOs in 2024 is a significant improvement over the number of IPOs in the past two years and is much more in line with pre-pandemic levels.

IPOs by Volume (2000 – 2024)

2024 IPOs by Industry

The table below shows the IPOs in 2024 by industry.

SPACs

SPACs continued to be a significant presence in the IPO market, accounting for nearly 26% of all IPOs in 2024 compared to 20% in 2023. After additional regulation followed the SPAC craze in 2020 and 2021, SPAC sponsors are making improvements on corporate governance, disclosures, deal structuring, and risk mitigation. A new wave of SPACs emerged in the summer of 2024, leading to the uptick in total SPAC IPOs during the year. This new wave of SPACs will be targeting business combinations (i.e., “de-SPACs”) in 2025 and early 2026 across a broad range of industries.

Technology, Media, & Telecommunications (TMT)

TMT companies played a major role in the 2024 IPO market, accounting for 15% of the IPOs in 2024. Of the 34 TMT IPOs during the year, 21 were software and IT services companies. The companies that effectively integrated generative AI into their business models attracted significantly more investor attention. Looking ahead, the demand for companies demonstrating AI-driven results continues to increase, whether it is to enhance operational efficiency, drive product innovation, or better serve customers.

Consumer Products & Services (CPS)

CPS companies provided a boost to the IPO market in 2024, accounting for 15% of last year’s IPOs. The 33 CPS IPOs in 2024 consisted of specialty business services, education and training services, apparel manufacturing, retail, food and beverage, and others. Consumer spending per household in 2024 was up year over year. However, lingering concerns over inflation and the labor market may cause investors to pull back if consumer spending starts to slow.

Pharmaceuticals & Life Sciences

Pharmaceuticals and life science companies also played a significant role in the 2024 IPO market, accounting for 13% of the 2024 IPOs. There were 29 pharmaceuticals and life sciences IPOs in 2024 compared to 25 in 2023. Of these 29 IPOs, 25 were biotechnology companies. These biotechnology companies are going public to raise crucial capital required to sustain and advance their research and development endeavors. It has become clear in recent years that biotechnology companies that show continuous progress towards their development goals using clinical data and the achievement of key regulatory milestones are more likely to have a successful IPO.

What to Expect in the Year Ahead

The recent U.S. elections provided investors with enthusiasm over a return to pro-business and deal-making policies, which was expected to lift some of the uncertainty that has kept capital sidelined over recent years. While there is still some enthusiasm over the new administration’s pro-growth policies such as proposed tax cuts and deregulation, it seems clear that some of the euphoria has started to fade as concerns grow over inflation and geopolitical tensions.

Certain policies under the new administration, such as significant new tariffs on steel and aluminum imports; dismantling and de-funding certain federal agencies and programs; and U.S. involvement in conflicts in the Middle East are creating uncertainty that investors had hoped to leave behind in 2024. In January 2025, the Federal Reserve held interest rates steady and indicated that inflation was still a concern amongst a tepid view of the labor market. IPO activity in 2025 will depend heavily on economic stability.

Despite the challenges, the U.S. public markets are still among the strongest in the world. Based on historical trends, there is often a significant uptick in the average number of IPOs during post-election years when compared to the average during election years regardless of the party in the White House.

The U.S. economy is expected to grow steadily in 2025. While we do not expect a windfall of IPO activity like we saw during the “SPAC boom,” we do expect IPO volume and value in 2025 to surpass recent years. We also expect the economic outlook will continue to favor technology and biotechnology companies, with companies that are able to leverage generative AI continuing to pull ahead.

Russell Frank contributed to this article.